Can I stop being someone’s guarantor?

Unfortunately, if you have signed the loan agreement and the loan has been successfully paid out, you cannot stop being someone’s guarantor. So the answer is simply, ‘no.’

We appreciate that guarantor loans can last for up to 5 years (60 months) and half way through you might decide that you don’t want to be involved any more or perhaps you are no longer on good terms with the person you are guaranteeing. Nonetheless, once you are their guarantor, you cannot change this.

Can a guarantor stop being a guarantor?

Sadly no. The reason that you cannot be removed from the loan agreement is because the person who guarantees a loan plays a huge role in the application process. The individual’s credit history, affordability, employment status, age and location all have an impact in whether the loan is approved, how much is borrowed and how long for – so removing that guarantor and bringing in a new one would put this all out of sink. If you were replaced with another person, they may not have the same credentials and this would change the risk for the lender.

Can you change guarantor?

No, as mentioned above, whether the loan is accepted and the amount you can borrow is based on the guarantor’s background checks. So if you were to switch with someone, they might have a different employment status, credit history and affordability – so had they been their initial guarantor, they would likely have different loan terms or may be not have been funded to begin with.

In the unlikely event that someone dies, there is a chance that you can be replaced by a spouse of the deceased, depending on the lender. (Source: MoneySavingExpert Forum)

Can a guarantor withdraw and how do you stop being a guarantor?

Close the loan/pay off the loan early

Get the borrower/guarantor to pay off the loan early

The lender goes out of business

The most simple way to get out of being someone’s guarantor is for the main borrower to pay off their loan and essentially, terminate the agreement. Pretty much all guarantor lenders allow you to repay a loan early, so even if it lasts for up to 5 years, there’s no reason why it can’t be closed within a couple of months – although you may be charged an additional interest for closing the account within a certain period of time.

There are no other real ways to get out of guaranteeing someone’s loan and this really emphasizes why its so important for the borrower and their guarantor to have a good relationship and for there to be trust between the two. This is why in our guide of who could be my guarantor, we explain that the best ones are probably life partners, parents or siblings – because they are more likely to still be connected after 5 years instead of a friend or work colleague that comes and goes.

The Independent explains that there is ‘a risk for everyone involved’ in a guarantor loan so it is important to fully read the terms and conditions before completing the application.

Unfortunately, another way to get out of an agreement is if the individual is no longer alive.

Can I have more than one guarantor on my application?

No, our lenders state that you can only have one person to guarantee your loan. The only exception is TFS loans who are willing to accept two tenant guarantors if you do not have a homeowner guarantor.

This individual will agree during the loan application to repay your loan if you default on payments. Their creditworthiness is calculated during the application process when deciding if you are eligible for a loan.

What happens if the guarantor dies?

In the rare event that your guarantor dies, the lender may have a claim on their estate or property in order to recover their debts. There is also the chance that their spouse may be liable for any payment.

When someone on the Money Saving Expert Forum mentioned this scenario with Amigo loans, the community offered some good advice, including speaking to a solicitor.

You have the 2-week period to change your mind

Most of the lenders we feature on our comparison site give you two weeks to change your mind once the loan has been funded. The monies are sent to your guarantor’s bank account first who can decide to send the funds straight back or send them on to the main borrower if they wish to proceed. There are no extra charges if you want to give the money back after this 2 week period.

This process is also a smart way to ensure that there is actually a guarantor and borrower part of the transaction, and it isn’t just person part of the agreement. If there is genuine trust and relationship between the two parties, the money will be passed on as per normal.

Can I stop being a guarantor in a tenancy agreement?

Being a guarantor for a property is not very common in the UK, whether its for buying or renting. However, in Australia and New Zealand, it is extremely common – so its typical for people to ask how they might be able to get out of an agreement, particularly in the case of paying for someone else’s rent.

Whilst the responses online are mixed, it is recommended to check the terms and conditions of your agreement because you might be able to exit if a certain amount has been paid. If you consider that the guarantor’s role is to step in if the customer defaults, but if the majority of the loan has already been repaid, this is less of an issue. So you could potentially exit if a certain amount of time has passed or amount has been paid.

Speak to your lender

Every lender we feature has a different policy when it comes to exiting an agreement. So whilst it is unlikely, some may be more lenient than others and there is no harm in getting in touch by phone or email.